QUESTION

I’m in Nj under the Cares Act can child support be taken from 401k If I cash it out?

Asked on Jul 24th, 2020 on Child Support - New Jersey
More details to this question:
I’m a bus driver.. Have medical bills I can’t pay.. owe arrears for CS. If I cash out my 401k to pay bills will CS automatically take the money?
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1 ANSWER

Divorce Attorney serving Short Hills, NJ at Diamond & Diamond, P.A.
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As a general statement, neither your former partner nor the probation department can attack your retirement account, but if the court was to conclude that you are willfully refusing to pay your child support obligation or related expenses, the court can order an invasion of your retirement assets for the payment of those expenses, which  invasion will also result in the imposition of taxes and penalties due on the invasion, which will be your responsibility to pay as well. As an alternative, since you acknowledge that you owe the money and dont have the cash flow for the payments, maybe you take the initiative and suggest to your former partner, that you and she enter into a qualified domestic relations order ( called a QDRO) for the payment of all of the money owed for back child support and unpaid unreimbursed health care costs - cleaning up your outstanding obligations. By doing so, the money will be taken from your retirement account and rolled over to a retirement account in your former partners name and then she can withdraw all or part of it as needed ( and she may also qualify for a hardship, avoiding the penalties for the withdrawal). It could be a win-win for both of you. 
Answered on Aug 12th, 2020 at 6:53 AM

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